CONTENTS

British Government confidential papers of 1979 publicised on Wednesday
according to the 30-year rule, said that the outcome of the meeting
between Cyprus President Kyprianou and the Turkish Cypriot leader Rauf
Denktash under the chairmanship of the UN SecretaryGeneral Dr Waldheim
on 1819 May 1979, was a great deal, better than generally expected.

A document of the British High Commission in Nicosia pointed out that
both leaders showed a high degree of flexibility. President Kyprianou
was said to be the more ready to try to find compromises although the
Turkish Cypriot side seemed to have made the more significant
concessions. The same document refers to major differences still
remaining between the two sides with the danger of the accord being
undermined before the inter-communal talks even resume on the 15 of
June.

According to the papers, difficulties arose from the second meeting of
the interlocutors George Joannides and Umit Souleiman Oman on June 18,
with the main subject of discussion that of the missing people. With
Varosha being the main subject of discussion at the third meeting, on
the 20th of the month, the atmosphere of the talks became even worse.
These initial difficulties could be overcome if it was not for the
insistence by the Turkish Cypriot side on acceptance of the concepts of
bi-zonality and security.

Speaking at a press conference on 24 of June, the Turkish Cypriot
leader Rauf Denktash, alleged that his agreement with President
Makarios on 12 February, 1977, provided for a bi-zonal federation. He
further alleged that Makarios had asked for the avoidance of words and
terms, which could cause difficulties for him within the community. He
also made a reference to a speech by the then Foreign Minister John
Christofides, to the Security Council on the 31st August 1977,
acknowledging that the Greek Cypriot side had agreed to bi-zonality.

The Greek Cypriot negotiator George Joannides categorically denied that
any agreement had been reached with regard to bi-zonality or security.
A Greek Cypriot spokesman said that neither in the Guidelines agreed at
the meeting between the late President nor in the UN minutes was there
any reference to bizonality. The spokesman said that it was right to
say that the bi-zonal question was raised at the Makarios- Denktash
meeting but it was rejected by the Greek Cypriot side as the Turkish
Cypriot side rejected a number of Greek Cypriot proposals.

President Kyprianou stated that the Turkish Cypriot side could of
course raise the questions of bizonality and security at the
inter-communal talks. What the Greek Cypriot side could not agree on
was to acceptance of the two concepts as preconditions for the
resumption of the inter-communal talks.

In an effort to ease the way for the resumption of the talks, the UN
Secretariat prepared a Memorandum with the following formulation to
overcome the two thorny points: 1--- Both parties have reaffirmed
their support for a Federation as provided in the Guidelines, which
will be composed of two constituent parts that have variously referred
to as areas or zones. 2--- Both parties have indicated that the matter
of security may be raised and discussed in the inter-communal talks. It
is understood that the settlement will provide for the security of both
communities.

Nevertheless, 1979 ended without the resumption of the inter-communal
talks. According to the documents, this can be explained, perhaps, by a
reference in a British High Commission document dated 24 September
1979. ``There is increasing evidence that the 19th May Agreement was
not welcome by the Turkish Government which has since apparently sought
ways of preventing any chance that resumed inter-communal talks might
make progress,`` it is noted.

A Foreign Office paper prepared for the then Foreign Minister Sir Ian
Gilmour, who would see the Cypriot Foreign Minister Nicos Rolandis, on
the 21st of April 1979, said that under the Treaty of Establishment,
the United Kingdom undertook to provide aid of £12 million to Cyprus
over the 5 years to 1965 and to make a number of other special
payments.

In 1965 and before the end of each succeeding period of 5 years the
Government shall review, in consultation with the Government of the
Republic, in the following period of 5 years the provision of aid. From
1965 no aid has been given.

The Cyprus Government, the same document goes on to say, have regularly
drawn attention to the British commitment. It has at times been
suggested that rent should be paid for the SBAs. If this should be
ruled out, rent should be paid for retained areas and for facilities
such as roads. At one stage, £150 was mentioned as owing to Cyprus.

The British Government supported that Cypriot claims had no legal
validity but with pressure from the Cyprus Government building up an
offer was made, in June 1978, of a loan of £7.5 at 6% 25 years
maturity. The money will be used for purposes benefiting both
communities. This offer, the British Government said, represents the
total bilateral aid that will be available to Cyprus for the
foreseeable future. It is to be regarded as discharging Britains
obligation to the Cyprus Government.

Rolandis said that it was imperative for the British Government to take
action. He suggested that agreement could be reached on the basis of a
draft which he gave to Sir Ian. The Cypriot Minister said that
``Britain offered a loan of £7.5 million. Cyprus was asking for a grant
of over £200 million.``

Nicosia Mayor Eleni Mavrou has said that according to reconstruction
plans, Eleftheria Square, at the centre of the town, will become an
environmentally friendly place.

Speaking to CNA, Mavrou said that the amended reconstruction plans of
the Square and the moat extended up to Solomou Square provide for the
planting of more trees in the area, while venues for holding events and
activities will be created.

Mavrou said that archeological excavations have resulted in long delays
in the implementation of the project and added that the aim of the
Municipality is to complete and deliver the biggest part of the project
before Cyprus takes over the EU rotating presidency in 2012.

After an intensive training block in Argentina during December, Cypriot
tennis player Marcos Baghdatis will participate in the Brisbane
International, which begins Sunday 3rd of January, marking the first
tournament of the 2010 ATP World Tour season.

Marcos Bagdatis ends 2009 on a high note, having won his third ATP
World Tour title in Stockholm, which was preceded by a Challenger win
in Tashkent. Overall, he has won his past nine competitive matches,
dating back to a close three-set loss to Rafael Nadal in Beijing in
early October.

Keen to make his mark quickly on the court, Marcos will arrive in
Brisbane by Thursday 31st December, meaning he will overcome his jetlag
and adjust to the conditions nicely in advance of the tournament start
on Sunday. Bagdatis will be joined in Australia by Coach Eduardo
Infantino, trainer Diego Martos and Argentine player Juan Spina.

Following his appearance in Brisbane, Marcos will compete in the
Medibank International in Sydney before contesting the first Grand Slam
of the year the Australian Open in Melbourne.